Wall Street Letter VOL. XLVI, NO. 7 - July 2014 | Page 6

NEWS

06

develop our business strategy, local
institutional knowledge, and network
of EU AIFMs during the transitional
period afforded by the FCA and most
other NCAs (National Competent
Authorities) across the EU.”
The fund administrator has been
ready to go to market since October
of last year and has since signed on
about 15 firms, representing 25%
of the hedge fund AuM in London,
which predicated the need for the
additional software support office and
the 10-15 hires needed to staff the
office, according to Connell.
“We are planning to open a
software development office in the
UK time zone to support clients in
addition to the London locale,” said
Connell. “We expect most medium
and large firms to make decisions
around what vendors to use very soon
so we are expecting a mad scramble
over the next few months selecting
providers to deal with the pending
regulations.”

TECHNOLOGY

Trading
Technologies to
replace X_TRADER
Chicago-based Trading Technologies plans to replace its 20-year-old
X_TRADER platform with a novel
offering for the buy and sellside called
Nextrader, according to CEO Rick
Lane.
The platform will enter beta testing
in the third quarter and the function should be available to customers
before year end, he added.
“This is a ground-up rewrite of the
trading platform, offering better performance and far more flexibility in
terms of upgrades revolving around
technology and regulatory needs,”
said Lane.
Nextrader will be offered as a
software-as-a-service function that
achieves low latency by placing

infrastructure functions that are
nonessential to trading latency in a
hybrid cloud that is hosted by Trading Technologies, he explained. The
model cuts the need for a firm to host
servers on site or purchase space in a
co-location center, Lane added.
“There is a cloud component in
the sense that anything non-latency
oriented will be leveraged to the
cloud, which allows us to operate on
a greater scale,” said Lane. “Software
as a service for our clients means that
there is no need for a data center,
buying of servers or even a backend
to manage. Clients just create an account and begin trading.”
The function also allows for additional mobile connectivity in the
form of monitoring markets, viewing
positions and orders, and having
access to system functions like Autospreader, the spread trading functionality, and other synthetic order types,
Lane noted.
“People have become accustomed

DATA

TCA not critical for mid-sized hedge funds

M

id-sized hedge funds aren’t using
post-trade transaction cost analysis or pre-trade analytics services made
available to them by their brokerage firms
as may be expected, according to the
results of a new report from Woodbine
Associates on the demographic.
The report, which is the second of a
two-part series on the needs of mid-sized
hedge funds (classified as having assets under management between $1bn and $5bn),
notes there is little more than marginal
interest in either service among the hedge
funds. Instead, funds of this size indicated
more emphasis on intra-day feedback
across low- and high-touch execution.
Woodbine’s survey results indicate that
for high-touch trading, 100% are either
heavily or marginally interested in the
intraday feedback they receive from their
sales traders. That compares to just 43%

level of interest placed among
indicating marginal interest
agency brokerage firms to
in post-trade TCA (with 57%
make varying degrees of TCA
indicating they don’t use it at
available.
all or just to validate observa“This demographic believes
tions) and 14% that indicated
it gets high quality execumarginal interest at most in
MATT SAMELSON
tion through interacting with
pre-trade analytics.
broker personnel, and in
Results are just moderately Principal at Woodbine Associates
some cases, after the order
different with respect to lowhandling, they use analytics to maybe
touch trading strategies – 60% of responround out the picture and give them the
dents said they are heavily or marginally
sense that they have gotten some good
interested in intraday feedback. For both
quality execution,” he said. “So if you’re
post-trade TCA and pre-trade analytics,
an agency broker with no research offerjust 30% are marginally interested in the
ing and you think you will sell them TCA,
service or use it just to validate observamaybe you should think twice about that
tions and 70% said they don’t use the
strategy for this demographic as a whole.”
feature at all.
Survey responses were generated from
Matt Samelson, principal at Woodchief operating officers, trading personbine Associates and author of the report,
nel, CFOs and portfolio managers at 24
said the results are interesting in light of
hedge funds.
the fact that there has been a significant